Utah Code 59-10-1404.5. Resident pass-through entity taxpayer’s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity

(1)	In determining the taxable income of a resident pass-through entity taxpayer, an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity shall be made in accordance with this section.

Terms Used In Utah Code 59-10-1404.5

Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Corporation: includes :

(i)	an association;

(ii)	a joint stock company; and

(iii)

an insurance company. See Utah Code 59-10-103

Pass-through entity: means a business entity that is:

(a)

the following if classified as a partnership for federal income tax purposes:

(i)	a general partnership;

(ii)	a limited liability company;

(iii)

a limited liability partnership; or

(iv)	a limited partnership;

(b)	an S corporation;

(c)	an estate or trust with respect to which the estate's or trust's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; or

(d)

a business entity similar to Subsections (11)(a) through (c):

(i)	with respect to which the business entity's income, gain, loss, deduction, or credit is divided among and passed through to one or more pass-through entity taxpayers; and

(ii)

as defined by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act. See Utah Code 59-10-1402

Pass-through entity taxpayer: means a resident or nonresident individual, a resident or nonresident business entity, or a resident or nonresident estate or trust:

(a)

that is:

(i)	for a general partnership, a partner;

(ii)	for a limited liability company, a member;

(iii)

for a limited liability partnership, a partner;

(iv)	for a limited partnership, a partner;

(v)	for an S corporation, a shareholder;

(vi)	for an estate or trust described in Subsection(11)(c), a beneficiary; or

(vii)

for a business entity described in Subsection(11)(d), a member, partner, shareholder, or other title designated by the commission by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and

(b)

to which the income, gain, loss, deduction, or credit of a pass-through entity is passed through. See Utah Code 59-10-1402

Resident pass-through entity taxpayer: means a pass-through entity taxpayer that is a:

(a)	resident individual; or

(b)

resident business entity. See Utah Code 59-10-1402

Taxpayer: means any of the following that has income subject in whole or part to the tax imposed by this chapter:

(i)	an individual;

(ii)	an estate, a trust, or a beneficiary of an estate or a trust that is not a pass-through entity or a pass-through entity taxpayer;

(iii)

a pass-through entity; or

(iv)

a pass-through entity taxpayer. See Utah Code 59-10-103

(2)

For a resident pass-through entity taxpayer of a pass-through entity except for a pass-through entity that is an S corporation, the resident pass-through entity taxpayer‘s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:

(a)

if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer’s distributive share of the item of income, gain, loss, deduction, or credit:

(i)	for federal income tax purposes; and

(ii)	determined under Section 704 et seq., Internal Revenue Code; or

(b)

if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer’s distributive share of income, gain, loss, deduction, or credit:

(i)	relating to the pass-through entity generally;

(ii)	for federal income tax purposes; and

(iii)

under Section 704 et seq., Internal Revenue Code.

(3)

For a resident pass-through entity taxpayer of a pass-through entity that is an S corporation, the resident pass-through entity taxpayer’s share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is:

(a)

if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer’s pro rata share of the item of income, gain, loss, deduction, or credit:

(i)	for federal income tax purposes; and

(ii)	determined under Section 1366 et seq., Internal Revenue Code; or

(b)

if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer’s pro rata share of the item of income, gain, loss, deduction, or credit:

(i)	relating to the pass-through entity generally;

(ii)	for federal income tax purposes; and

(iii)

under Section 1366 et seq., Internal Revenue Code.

Enacted by Chapter 312, 2009 General Session

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